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Roberts, Inc., completed the following transactions during the current year. Roberts initially records supplies and insurance as expenses and maintains a liability account for estimated warranty expenses. Source documents are abbreviated as follows: check, C; memorandum, M; receipt, R.
- Journalize the following transactions in a cash receipts journal.
|Aug. 10.||Agreed to a 180-day, 8% note with National Bank for $20,000.00. R123.|
|Oct. 20.||Received$ 25,000.00 from First American Bank, signing a 90-day, 10% note. R149.|
|Nov. 5.||Signed a $13,000.00,90-day, 9% note with First Commerce Bank. R152.|
|Dec. 9.||Drew$6,200.00 from its First American Bank line of credit. The bank deposited the funds directly to its checking account. R165.|
- Use the following information to journalize adjusting entries for prepaid expenses and accrued expenses on December 31 of the current year. Include the adjusting entry for the accrued interest on the outstanding notes payable.
|Value of prepaid insurance||2,400.00|
|Additional federal income tax owed||875.00|
Journalize the appropriate reversing entries on January 1 of the next year.
Calculate the maturity date for each note payable and the total amount of interest due at the maturity date.
Journalize the following transactions on a cash payments journal. For the payment of each note payable, use the maturity dates calculated in the prior step.
|Jan. 12.||Wrote a check to John Patterson for parts he purchased to repair an item under warranty,$89.95. C394. Issued Check No. 405 for the maturity value of the First American Bank note, plus interest.|
|31.||Used the bank's Internet site to pay $1,000.00 plus$75.69 interest on its line of credit. M84 (enter the memorandum number in the Check No. column).|
|Paid the maturity value of the First Commerce Bank note, plus interest. C423.|
|Wrote Check No. 428 to pay off the National Bank note, plus interest. C428.|
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